Why Would You Need Insurance?
Imagine that you are on a road trip with one of your friends. You are about to leave the hotel one morning and you notice that the side window of your car has been broken. What will you do? You call your parents and they tell you to call the insurance company since someone has broken into your car. Then, you notice, not only did the person smash the window, but they also took your laptop that was in the trunk. Will your insurance cover the damage to your car and your stolen laptop?
You have a really bad cold that has continued to get worse over the last four weeks. You go to the doctor only to find out you have an infection that must be treated in the hospital for two days. After you have recovered from your illness, you receive a bill from the hospital owing thousands of dollars.
Do any of these events stated above sound familiar? If this has never happened to you, you probably have heard about similar situations from friends or on the news. Despite our best efforts, sometimes things just don’t go the way we would like! You get ill, someone rear ends you in your new car, or your residence floods from the last storm. However, these events do not have to become financially disastrous for you if you have insurance to protect yourself and your belongings. Having insurance is a means of assuring your protection against risk and what could be a disastrous situation!
Pre-Assessment: Willing to Take Chances?
Do you think that you can predict your risks in life? Can you even predict whether a flipped coin will land with heads or tails facing up? Find a coin, or use an online coin flip simulator, and toss the coin ten times, recording your data on the Willing to Take Chances Worksheet. You will need to make predictions about whether a coin will land heads or tails and how many times it will land on each.
Once you have completed the worksheet, consider the following: did the coin land exactly how you guessed each time? Probably not! In fact, you might have guessed incorrectly several times. Are you willing to take this kind of risk or chance with your health, your property and savings, or your life?
Key Vocabulary
To view the definitions for these key vocabulary terms, visit the course glossary.
Beneficiary | Flood Insurance | Premium |
Claim | Guardian | Probate |
Collision Insurance | Homeowners Insurance | Renters Insurance |
Comprehensive Insurance | Insured | Trust |
Co-Payment | Liability | Trustee |
Deductible | Living Will | Uninsured Motorist |
Dependent | Medical Payments Insurance | Will |
Executor | Policy | |
Floater/Rider | Power of Attorney |